Government says it is right to freeze local housing allowances as rents are ‘potentially going down’

Work and Pensions Secretary says that decision means people have 'certainty' in the amount of cash they have

The government is right to freeze local housing allowances (LHAs) as rents are 'potentially going down', the Secretary of State for Work and Pensions Dr Thérèse Coffey has said.

During oral questions in the House of Commons yesterday, Labour MP Karen Buck questioned Dr Coffey about the government's decision to freeze LHA rates in cash terms in 2021 having only just ended the previous freeze at the start of the coronavirus (COVID-19) pandemic. Highlighting that the decision means that LHA rates will move back below the 30th percentile - as highlighted last week by the Office for Budget Responsibility - Ms Buck asked - 

'The Government have cut LHA consistently since 2010/2011, including freezing it from 2016 to this year. Will the Secretary of State tell us what estimate the Department has made of the effect on children in poverty of pushing the LHA back below the 30th percentile?'

Responding, Dr Coffey said - 

'The decision made last year was to increase to the 30th percentile in cash terms - that is around £1 billion of welfare support that has been added. On consideration, we felt it was right to continue the cash freeze as we recognise that around the country we are seeing rents potentially going down, although I recognise that in some places they may continue to rise. Overall, people have certainty in the amount of cash that they have. It is certainly not going back but about making sure that this is a permanent change and was not just a temporary one.'

The Work and Pensions Secretary's response is available from Hansard